Irish Construction Returns to Growth in July

The AIB Ireland Construction PMI rose to 53.0 in July 2026 from 45.4 in June, signaling a solid rebound in construction activity after the sharp contraction in the previous month. The recovery was broad-based, with all three sectors expanding for the first time in 15 months. Commercial construction led the upturn, while residential activity returned to growth after three months of contraction and civil engineering expanded for the first time since April 2025. New orders also increased following a marked decline in June, although the rise was only slight amid a scarcity of tender opportunities. Employment grew for a ninth consecutive month at a faster pace, while firms also increased their use of subcontractors. Input cost inflation eased to a five-month low, although costs continued to rise rapidly, while supply-chain disruptions persisted due to international shipping issues. Business confidence strengthened for a third consecutive month to a four-month high.

The AIB Ireland Construction PMI fell to 45.4 in June 2026 from 50.2 in May, marking the sharpest contraction in construction activity since September 2025. The downturn was broad-based, with activity declining across all three sectors, led by the residential segment, which recorded its steepest fall in nearly four years, while commercial activity contracted for the first time in five months. New orders also declined at the fastest pace since August 2023 as sharply rising prices discouraged clients from committing to new projects. In response, firms reduced purchasing activity for the first time in eight months, although employment continued to grow for an eighth consecutive month. Supplier delivery times lengthened due to shipping disruptions linked to the Middle East conflict, while input costs remained elevated amid higher oil and raw material prices, despite inflation easing slightly for a second straight month. Lastly, business confidence improved for a second consecutive month.

The AIB Ireland Construction PMI increased to 50.2 in May 2026 from April’s five-month low of 47.1, driven by a renewed increase in output and new orders. New orders grew following their first decline in five months in April, reflecting an improvement in customer demand. The rebound was driven by an increase in commercial activity, which grew at the fastest pace since March 2022. In response to the rise in new orders, firms increased staffing and purchasing activity, with employment rising at a solid pace for the seventh straight month, while input buying rose modestly. Delivery times lengthened, although the rate of deterioration was less severe than in April. On the price front, input costs increased, driven by higher fuel and oil prices amid the war in the Middle East, although inflation eased slightly compared to the previous month. Finally, sentiment improved from April's 41-month low, amid optimism that an end to the war in the Middle East would help improve business conditions.